- Analyst Willy Woo predicts the next crypto drawdown will be driven by a macro business-cycle downturn, a scenario Bitcoin has never experienced.
- Prior crypto cycles aligned with Bitcoin’s halving cadence and global M2 expansion, but Woo argues the next phase will hinge on the wider macro economy.
- The key test will be whether Bitcoin trades like high-beta tech equities or a defensive macro asset like gold during a recession, which will determine its correlation and liquidity dynamics.
Analyst Willy Woo says the next crypto drawdown is likely to be driven by a business-cycle downturn, a regime crypto has never traded through. Woo made his comments on Monday.
He mapped prior cycles to two forces that often aligned, starting with Bitcoin’s four-year halving cadence and global M2 expansion by central banks. He argues the coming phase will instead hinge on the macro business cycle. The last deep downturns of that kind were 2001 and 2008, both pre-crypto.
The test, per Woo, is behavioral. If a recession hits, Bitcoin could trade like high-beta tech equities or like a defensive macro asset akin to gold. The answer will set correlation and liquidity dynamics across digital assets.
Woo added that markets are forward-looking and already price liquidity paths such as M2. In his framing, either Bitcoin has already signaled a cyclical top in broader markets or it is set to catch up.
The 2 cycles: the halvening and global M2 liquidity Central banks inject M2 debasement in 4 year cycles. Both superimpose If we get a biz cycle downtown, like 2001 or 2008, it will test how BTC trades. Will it drop like tech stocks or will it drop like gold.
Willy WooRelated: UK Retail Investors Gain Access to Bitcoin and Ethereum ETPs as FCA Lifts Ban
Crash Incoming?
Many in the crypto community took a break from watching the crypto market over the past couple of weeks, after witnessing the biggest wipeout in its history. We’re talking about hundreds of billions wiped from the total crypto market cap — and nearly US$20 billion (AU$30.8 billion) in leveraged positions forcibly liquidated.
Altcoins lost a massive amount of their value as well, in some cases up to 90% of it. Bitcoin dropped significantly, from around US$124K (AU$191K) to just under US$109K (AU$167K) by Sunday. That’s a huge 10% loss for the leading digital asset.
It’s not the end of the world, however, as the market and its investors have proven to be resilient through these harsh shake-ups. As Crypto News Australia reported, the majority of investors remain bullish on Bitcoin heading into 2026, as per data from Coinbase.
Bitcoin is currently trading at US$112K (AU$172K), a 3.3% decrease in the last 30 days, as per data from CoinMarketCap.
Related: Strategy Boosts Bitcoin Holdings with $18.8M Purchase, Extends Lead as Top Corporate Holder
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